The real estate market is already tough enough — when you’re buying, renting, or refinancing a home, the last thing you want to worry about is being scammed. Unfortunately, criminals are getting more creative in how they target housing consumers. In 2022, real estate fraud resulted in victim losses of nearly $400 million, according to data from the FBI’s Internet Crime Complaint Center.

Here are five common real estate and mortgage scams to keep on your radar, plus tips to avoid becoming a scammer’s next victim.

1. Escrow Wire Fraud

How it works: You get an email, phone call, or text from someone claiming to be from a title company or mortgage escrow company with instructions on where to wire your escrow funds. Scammers often set up fake websites that appear similar to the title firm or lender you're working with, making it look legitimate. They use spoofing tactics, changing just a number or letter in their email address or website—something easy to miss at first glance.

If you blindly follow the wire instructions, you might find that you've become a victim of escrow fraud. The scammers could have withdrawn the funds from an offshore account and disappeared with your money.

How to protect yourself: Before sending money to a third party, always go back to the original documents you received from your lender. Call the phone numbers listed there to verify the wiring instructions you received. Never click on links in emails or texts, and always verify the information with a live person on the phone.

Be especially cautious of any email or text requesting a change to previously confirmed wiring instructions.

2. Loan Flipping and Predatory Lenders

Loan flipping happens when a predatory lender convinces a homeowner to refinance their mortgage repeatedly, often borrowing more money each time. Scammers charge high fees and points with each transaction, ultimately leaving homeowners with higher loan payments they can’t afford.

Seniors with memory impairment are especially vulnerable, as they might not realize they’re being taken advantage of, especially if they have significant home equity.

How to protect yourself: Seniors and those with cognitive issues should involve a trusted friend or family member in any financial discussions, especially regarding their mortgage. It’s also generally not in your best interest to refinance again soon after completing a transaction.

Work only with trusted banks or lenders, and always question fees and penalties. Make sure to carefully review all loan estimates and closing disclosures.

3. Foreclosure Relief Scams

When homeowners fall behind on payments, they can become desperate to save their homes. That’s when fraudsters, using public records of homes in preforeclosure, offer foreclosure relief services for a large, upfront fee. These scammers might even claim to be affiliated with government housing programs.

How to protect yourself: The best way to avoid foreclosure is to work directly with your loan servicer. If needed, enlist the help of a HUD-accredited housing counselor, who can offer advice and support. A scammer will tell you not to talk to your lender—if that happens, that’s a huge red flag.

Opening communication with your lender is key to finding the best solution for your situation.

4. Fake Listings and Rental Scams

Scammers often post fake property rental ads on Craigslist or social media to lure in unsuspecting renters. They may ask for an upfront payment to hold a property or show it, but in reality, they’re just trying to get quick cash and have no connection to the property.

How to protect yourself: Educate yourself on potential scams when searching for a rental. Get all transaction terms and details in writing, and always meet with the actual property owner before making a payment.

Never send a cash deposit upfront and always insist on seeing the property in person. Use checks, not cash, for any payments to ensure you have a record.

5. Bait-and-Switch Movers

When moving to a new place, you might come across moving scams. A company might give you an estimate for $4,000, but when they show up, they demand $10,000. Some scammers even hold your belongings hostage, refusing to deliver them until you pay a much higher fee than agreed.

How to protect yourself: Avoid choosing a moving company based solely on the price. Always ask for their license number and check for complaints with the Federal Motor Carrier Safety Administration (FMCSA).

Get at least three estimates in person or virtually, and avoid paying large sums in advance. A small deposit is typical, but reputable companies won’t ask for full payment until the job is complete.

How to Report Real Estate Scams

If you believe you’ve been targeted or have already fallen victim to a scam, it’s important to notify the proper authorities.

Start by filing a complaint with the Federal Trade Commission (FTC), which will help law enforcement agencies catch repeat offenders. You can also report scams to the BBB’s Scam Tracker to warn others. If you've shared personal info or financial details, make sure to visit IdentityTheft.gov to protect your identity.

For more guidance on where to report scams, visit USA.gov’s Scam Reporting Page.

Stay Vigilant, Stay Safe!

Scammers are constantly changing tactics to catch homebuyers, renters, and homeowners off guard. Stay informed and vigilant to protect yourself from these common scams. If you ever feel unsure about a real estate transaction or encounter any suspicious activity, contact your trusted real estate agent, lender, or other professional immediately to verify the details.

Disclaimer: This information is for general knowledge and informational purposes only and does not constitute financial, tax, or legal advice. We are not lawyers, financial advisors, accountants, loan officers, or mortgage brokers. Please consult with a qualified professional to understand your specific needs.